Top tips to avoid IT disputes

30th October 2023

For any business, the overhaul of its IT systems is a significant investment of time and money. The situation is only made worse when expectations are not met, whether in terms of performance or timescale, and resentment or disappointment sets in.

As IT contracts are likely to be in favour of the supplier, your business may well find itself being required to buy itself out of the contract or putting up with an unsatisfactory product. The disputes and business interruption which follow in such cases are going to be expensive, so we’ve provided our top tips on how to avoid them.

1. “If it ain’t broke…”

Any new IT service provider will be keen to demonstrate how its product is far better than what your business might currently have – but is it? If your current systems are not yet “creaking” under the strain of your growing business and cyber security requirements are being met, it may be best to stick with what and who you know.

This avoids the CAPEX – capital expenditure – investment required and the time needed to scope the new solution to meet your current expectations – at least for the time being. That said, cyber security is paramount to all businesses and the data they hold, so do not overlook essential security measures and always update your systems with the latest security patches when they come out.

2. Be clear on your requirements

If you do decide to take the leap and invest in a new IT system, it is important to decide what you actually want the system to do once installed. Good IT providers will facilitate this and provide guidance on what is available in the market to meet your needs. As part of this, it is imperative that the provider takes the time to familiarise itself with the existing and remaining systems to ensure compatibility and to understand the business’ needs.

3. Beware of “scope creep”

The main complaint we see from and about IT providers is “scope creep”. Without the scope of the work required being clearly documented, there is a risk the project – and the costs – will spiral. Both parties must be clear on what is needed, what the deliverables will be and when they are expected.

Time should be spent by the IT provider at the outset to really get to know the businesses existing system. This should be included in the agreement, and both parties should use ‘change requests’ if the scope does need to be altered during the project. Change requests can be a useful mechanism to avoid tasks falling out of scope and being subject to crippling day rates.

4. Budget management

As with any project, knowing what the overall cost is likely to be is important. However, it should be expected that the initial cost estimation will most likely be exceeded: this way you will not be surprised when it is. The extent to which the original budget is exceeded will depend on how well both parties manage the project.  Any ‘change request’ will likely increase the cost, so be sure to confirm what the additional cost will be, before it is incurred, and ensure this is documented.

5. Monitor progress

Significant projects should have contractually scheduled meetings included in the price for the parties to evaluate the progress being made. These should be utilised to the fullest extent. It will allow parties to identify any issues early on and avoid them becoming disastrous. Meetings should be minuted, with all action points agreed and signed off by both parties.

If ‘change requests’ arise as a result, these should be completed soon after the meeting, with copies kept with the minutes in a shared drive or retained safely by both parties. If progress is not made in accordance with the deliverables, be clear as to why this has occurred. The contract ought to say that if delays are as a result of the IT provider, any additional costs of putting the issue right should be born by the provider.

6. Licence management

The IT provider will most likely not be the owner of the software being deployed. The contract should be clear about what additional software licences are going to cost and the number of users which will need licences to access to the software. If the business’ head count increases during the project, be sure to increase the number of licences to avoid facing copyright infringement notices from the software provider.

7. Go or no-go

Testing of any new system is a crucial phase of any IT project. Make sure the right people are involved –  a cross section of those who will be using it in anger once it has gone live. If the system is not doing what it should, the additional work required should be in scope, in that the IT provider must make the amends within the agreed price.

Even if the project is behind schedule, avoid the temptation to go live with a system that is not up to scratch. Any acceptance of the system at this stage, without clear carve outs, will make challenging the performance of the system at a later date very difficult.

8. Support and training

People, generally, will find the easiest way to complete tasks. If their understanding of the system is incomplete, shortcuts will be found, and IT systems may fail because they are not being used as intended. A training programme – the cost for which should be determined at the outset – needs to be scheduled just before the system is to be used in a live environment.

There is no point having the training too early as the detail will be forgot by the time the systems are used. Any support function should be clearly defined, to include the number of calls expected or allowed for and the KPIs for the escalation of issues with increased urgency should be detailed so everyone knows what to expect, and disputes can be avoided.

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